MILWAUKEE (WITI) -- Deep in debt? FOX6's Contact 6 says you shouldn't trust any company coming along promising to pull you out.
"Basically, this company was saying 'okay, you have all this debt and we can settle it for approximately 45% of the debt,'" U.S. Postal Inspector Robert Clark said.
That is the pitch some debt settlement firms are making to consumers.
"They tell the customers stop making the monthly payments to the creditors, stop speaking to the creditors as long as you can make one monthly payment to us," Clark said.
Customers are asked to sign a three-year contract, and if they do, all of their debt will be paid off.
The catch is in the hidden fees and charges.
"Some of the victims that we`ve spoken to admitted 'I didn`t even ask what the fees were' because they were so happy to stop paying all the credit cards and pay one monthly fee that was affordable," Clark said.
Relief quickly turned to anger when consumers realized the money they were paying had not been sent to creditors.
"A lot of the victims called once they realized there was no money in their escrow accounts. The company would then point to the stipulation in the contract that says they`re allowed to collect these fees," Clark said.
Postal inspectors say in one case, there were more than 1,300 victims and $3 million in dispute. Customers had nowhere to turn.
"A lot of these creditors filed lawsuits against these people. A lot of these people had to go to court They were sued and had judgments against them and a lot of them had to file for bankruptcy," Clark said.
FOX6's Contact 6 says it's important to read a contract very thoroughly in order to avoid becoming the victim of a scam.